Will Newspapers Survive?

Mike Minehan

Newspapers definitely won’t survive in their present form. This is because print media are the most vulnerable to the economic recession and to the growth of the internet.

Newspapers are now the dinosaurs of the media world, and their extinction appears to be immanent.

For newspapers, the 2009 outlook was the worst ever. For example, in the first three months of 2009, Murdoch’s News Corporation revealed that profit from its newspaper division dropped to just $7 million from $216 million one year earlier.  And first quarter figures for 2009-2010 recorded operating income of just $US25 million, down from $US134 million last year (Sydney Morning Herald Business, 6 Nov., 2009, p5).

So, what to do about it? The rest of the world knows, but for the first time, in 2009, Murdoch also admitted that the traditional model of newspapers needs to change (New York Times, 6 May, 2009, Link ).

Murdoch owns 175 newspapers world-wide, and what Murdoch says and what Murdoch does is hugely influential.
 
Murdoch already operates a successful online version of the Wall Street Journal. This is a full subscription operation. But financial media is a special case. 800,000 investors are prepared to pay for information that they believe will help them make more money.

The case is different for quality journalism. Would enough readers be prepared to pay for a quality news site? Probably not. There are already too many sites out there that provide news for free. Google is one, and www.digg.com is another.

Digg filters stories from all over the Internet and presents them in a linear Google News-type interface. digg's content comes from its users and news items are usually in the form of a short summary and a link. These then go into a queue, where members vote on their favourites.

The 15 stories that attract the most votes -- or "diggs" -- are featured on the site's front page, which is updated several times an hour to keep the news fresh.

It's this innovative "by the people, for the people" writing and editing system that sets digg apart from other Web sites.

This has some people calling digg the future of news (Link).

But free, user-generated news is anathema to Murdoch, who has spent his life selling news, and making huge amounts of profit from it. In 2009, after surveying the wreckage of his newspaper empire, Murdoch speculated that he might now go online with a sort of News Corp electronic reader to be developed with Sony.

But this electronic version would probably not be only a news-only platform. Murdoch has his fingers in many other pies which are likely to be offered as a new smorgasbord of news, entertainment and sport.

Another model of newspaper survival is being tried by the London Evening Standard. The Evening Standard is one of Britain’s leading newspapers. But it’s been losing readers at around ten per cent per year for the last nine years. There’s too much competition in the UK evening newspaper market, and rival papers are handed out for free.

The Evening Standard solution is to drop its 50 pence cover charge completely, and compete head to head with the freebies. The Evening Standard is now being handed out, yes, completely free of charge.

The Standard claims the newspaper will continue to offer quality journalism. But the big change is its distribution pattern. This now includes – not only the usual commuters - but CEOs and anyone else the newspaper targets as being influential. The aim is to boost circulation and therefore advertising revenue. And advertisers are likely to be impressed by the current increase in circulation from 180,000 to 600,000 (Link).

So far, the idea of giving out quality newspapers for free hasn’t caught on in the rest of the world. Not surprising.

But watch this space.